Business license: the second chance
Previously, the managers of a bankrupt company were de facto definitively deprived of any possibility of obtaining a new business license, and therefore of being able to create or manage a Luxembourg company again.
After the Covid crisis, the legislator however wanted to open the way to a “second chance” to allow, under certain conditions, the directors of a bankrupt company to be able to manage again a Luxembourg company, even if the bankrupt company has left significant debts with the administrations (taxes or social security).
A second chance will be granted to managers in particular when the bankruptcy was caused by events such as a natural calamity, an involuntary destruction of the equipment, the loss of an important customer, a public construction, a loss of profitability following a significant market disruption, a pandemic or even the medically certified incapacity for work of the manager.
It will then be important for the manager who is a candidate for a new establishment authorization to put together a solid file in order to convince the “New Chance Commission” of the viability of the planned new activity.
Applicants for a new business license must also be able to prove that they had neither failed to declare the taxes due (even if the taxes could not be paid) nor to file in the commercial register the annual accounts of the bankrupt company that they administered.
The manager who wants to apply for a new business license must then convince the “Second Chance Commission” of the viability of the planned new activity.
Applicants for another business license must also be able to prove that they had neither failed to file the tax returns due (even if the taxes could not be paid) nor to file with the Luxembourg business register the annual accounts of the bankrupt company that managed.
